Allegra Spender seeks buy-in on need for tax reform

Independent MP Allegra ­Spender hopes to kickstart a ­conversation on how to improve the nation’s tax settings, starting by hosting a roundtable of ­experts.

Independent MP Allegra Spender believes the country’s tax system needs an overhaul to make it more efficient, simple and fair. Picture: NCA NewsWire / Gary Ramage

Independent MP Allegra ­Spender hopes to kickstart a ­conversation on how to improve the nation’s tax settings, starting by hosting a roundtable of ­experts including former Treasury secretary Ken Henry.

Ahead of Friday’s event at Parliament House, Ms Spender told The Australian the country was in dire need of a tax reform package that transcended politics, and that there had been “a long-running argument about reform, but very little action”.

Jim Chalmers has made it clear his government is pursuing a “staged, methodical approach” to reform, including the planned $2bn change to super tax concessions for large balances.

But Ms Spender said piecemeal changes created a vocal group of those who stood to lose, without a counterbalancing group of winners. “Tax reform is about trade-offs. I think we should look at a big reform, but do it slowly and build a case over time,” she said.

The member for Wentworth in Sydney’s eastern suburbs said she planned further roundtables with business groups, unions, and in the community, with a view to creating a white paper by the end of the year.

ANU Tax and Transfer Policy Institute director Robert Breunig, who will attend Friday’s event, agreed the tinkering done to the tax system over recent decades had ultimately proved counter-productive.

“If you say what has piecemeal reform looked like in the past 20 years, I would say it has made the system worse, because it has added complexity and that ends up being exploited … and leads to unfairness,” he said.

Professor Breunig said the country had an underlying issue of paying for the ballooning government spending – a situation that had become more acute in the wake of the pandemic.